Understanding the re-collateralization mechanism of Tenet public chain: How to bring liquidity and yield opportunities to LSD?
Understanding the re-collateralization mechanism of Tenet public chain for liquidity and yield opportunities in LSD.
Tenet is an EVM-compatible blockchain built using the Cosmos SDK, aimed at making the chain more secure through a diverse PoS mechanism and using LSD as validator collateral. Cryptography researcher Jiraiya wrote about the Tenet mechanism, including the DiPoS consensus mechanism, tLSD, the TENET economic model, and its native stablecoin protocol.
1) DiPoS consensus mechanism: This mechanism allows network consensus to be achieved by validators who hold a basket of assets, preventing the network from being dominated by a large entity that controls a single asset and greatly reducing the possibility of network attacks. The current list of staked assets is allocated to ETH, ATOM, BNB, MATIC, ADA, DOT, and TENET; 2) Active staking providers on Tenet can issue tLSD (Tenet LSD), which provides staking rewards and participates in Tenet validation to earn network transaction fees;
3) TENET and veTENET: TENET is the gas token of Tenet. tTENET needs to be staked with the corresponding staking provider to obtain validation rewards for ensuring the security of the chain. Alternatively, users can stake tTENET on veTENET to obtain different benefits, such as governance voting rights. For veTENET holders, there are many potential sources of income, such as being able to receive 100% withdrawal rate and 50% transaction fee from validators, and 100% minting and redemption fees of Tenet stablecoins, etc.; 4) Tenet’s native stablecoin protocol: Using the Liquity model, users can mint a decentralized dollar-pegged stablecoin (LSDC), which is an interest-free loan collateralized by assets such as ankrBNB, wstETH, and cbETH. In addition, LSDC can be redeemed at any time for the face value of the collateral. Users can also earn additional income by putting LSDC into the stablecoin pool.
Reference: https://twitter.com/JiraiyaReal/status/1674372199745200129
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